Branson will still own more than half of Virgin Atlantic, and the carrier will continue to fly as a separate airline under its own name.
Virgin Atlantic has been struggling. It reported a pretax operating loss of 80.2 million British pounds in its most recent fiscal year, even as the number of passengers it carried rose 2 percent. It indicated in 2010 that it might be interested in some kind of tie-up with another airline. British media reports at that time said that Delta was interested.
Delta's Anderson estimated that U.S. business travelers spend some $2 billion a year flying between New York and London Heathrow.
By attracting more business travelers flying between New York and London, the deal could bring Delta hundreds of millions of dollars in added revenue starting in 2014, estimated Buckingham Research analyst Daniel McKenzie. Some of that business will probably come at American's expense, McKenzie wrote.
Delta has made several moves in recent years to expand its route map.
One of the attractions of its 2008 purchase of Northwest Airlines was Northwest's extensive Asia network. Delta paid $65 million in August 2011 for a stake in Grupo Aeromexico. It was part of a deal to expand their existing commercial alliance by linking each other's passenger networks. And in December 2011 Delta invested $100 million in GOL, Brazil's second-largest airline.
Shares of Atlanta-based Delta Air Lines Inc. rose 52 cents, or 5.1 percent, to close at $10.66.
Associated Press Writer Robert Barr in London contributed to this report.